“Test, test test!”

It’s the unglamorous advice that no one wants to hear–except the few people who actually do it and seize the fistfuls of cash that lazier advertisers are leaving on the table. Let there be no doubt–sustained, serious testing is what separates the men from the boys in Google AdWords. It is what allows you to move beyond the theories and promises of e-books and instructional PDFs and see the reality of your actual, unique PPC campaigns. It is what guides you in making profitable tweaks and changes. But be careful! If you make any of these 5 mistakes, your test results could be inaccurate and lead you on a wild goose chase away from profitability!

1. Statistically insignificant split tests
   Every AdWords marketer should be familiar with the concept of statistical significance. That is, if you are running 2 ads against each other in order to determine the higher-performing ad, you cannot make your decision after a day or two. Rather, you need to give each ad enough time to run so that when the results emerge, you can confidently say the ad with better stats is truly the better one. Without allowing this time to pass, how can you be sure the apparent “winning” ad is not just a fluke that benefitted from a random spike in clicks? If this sounds puzzling or time-consuming, don’t worry, it’s not.

   The free calculator at Vertster.com can determine in seconds whether you have enough campaign history to prove ad A really is outperforming ad B. Use this before making any split testing decisions on your Google ads!

2. Not tracking profit per impression
   RocketClicks co-founder Glenn Livingston was quite possibly the first marketer to realize that profit per impression is the most important AdWords-related metric–not click-thru rate (CTR) or conversion rate, but which ad put the most money in your pocket each time it was displayed. As he notes in his PDF report on the subject [emphasis added]:

   “Google has everybody focused on CTR and conversion. But CTR + conversion individually don’t give you the right information to make your critical split testing decision. You might be surprised to note that Google isn’t really pricing their traffic according to CTR, even though that’s how you pay for it. All they have to sell you is space (impressions), so they’re doing the math behind the scenes to figure out how much money they make per impression.”

   It should go without saying that this is the number that counts. Fortunately, there’s a free web-based calculator that will let you determine profit per impression without putting together any spreadsheets or formulas. Use it!

3. Prioritizing CTR above conversion rate
   An even deadlier testing sin than not tracking profit per impression is prioritizing CTR above conversion rate in your tests. This is a serious error, because as a PPC marketer you really need to be tracking dollars, not percentages. A high CTR in and of itself does not necessarily mean you are making money. In fact, it could mean you are losing money–after all, a high CTR only proves that lots of people are clicking your ad. If they are also buying your product, this is a good thing. But if they are only clicking your Google ad and leaving, your high CTR represents nothing but wasted money.

4. Mixing content network traffic with Google traffic

   

   If you want to advertise on Google search results pages as well as the content network (the vast array of blogs and websites running targeted Google ads), you should maintain separate campaigns for this. The reason is that clicks from search engine queries and clicks from website ads are different sources of traffic. People are in a different frame of mind and a different place in the buying process depending on which of these ads they click and arrive at your website from. Therefore, grouping them both into one campaign and showing them identical ads serves only to distort your statistics and make it harder to determine which ads are truly making you the most money. Remedy this by going into your campaign settings and making sure only Google search is checked.

   (Note that this is not to say you should ignore the content network. Far from it! We are only advising that you maintain separate campaigns for PPC and content network so that you can accurately measure the results of each of these different traffic sources, rather than muddying the waters by combining them.)

5. Letting Google “optimize” your ad rotation

   

   In all their benevolent wisdom, Google will, by default, monitor which of your ad(s) get the highest CTR and display those most often. At first glance this sounds helpful–who wouldn’t want to put their best foot forward and show their highest performing ad as much as possible? But this is actually not your goal. As an AdWords marketer doing serious testing, your goal is to continuously beat your winning ad, thereby pushing your CTR, conversion rates and profit per impression ever higher on an ongoing basis. The only way to achieve this is to give all your ads the same amount of exposure and let the best one win. Luckily, this is not at all difficult. Simply visit your campaign settings and check “Rotate: show ads more evenly” instead of “Optimize.”

Alternative sources of revenue

While advertising tends to be the main source of income for many online publishers, consider alternative sources to make up for lost revenue. Give some thought to services ancillary to blogging on your own site, such as web design and development, search engine optimization, blog consulting (blogger training, management, and editing), and contributing to other blogs. These are all skills that on a rudimentary level can be acquired online, absolutely free of cost (with the exception of your time), and will not just add value to your blog (as you improve the design and seo) but can make you additional income (from design, optimization, and consulting services – as you apply lessons you’ve learned from your blog to those of others).

In addition to service-based revenue, you can also make up for lost income by adopting additional revenue models such as donations (work better than you would think, especially for a loyal audience that understands your predicament), products (e-books and affiliates), and remember even if you don’t offer services yourself, you can always charge for lead generation.

Time to invest in yourself

While the declining market may decrease your monthly revenues from advertising, it doesn’t mean that it will decrease the value of your blog. Revenue model evaluation is only one of the many factors you should consider. The others are:

1. What is your level of profitability (total revenue minus total cost)? Evaluate your total costs and determine whether there is any room for reducing costs. What better time to increase your profitability than when your revenue stream is decreasing?
2. How are your search engine rankings? Take an inventory of your site and research your niche (vertical). Figure out what your ideal keywords are and determine the competitiveness of each. Look at your analytics and see what you’re already ranked for and how you can improve those rankings by improving your internal optimization.
3. What is your uniqueness factor? It is especially difficult to survive in a highly competitive vertical as the underdog. Ask yourself, how competitive the industry is, who the competitors are, what their size is relative to you, and what their main focus is. Once you’ve figured that out, think about how you can differentiate yourself from these competitors. Why compete with them when you can co-exist in the vertical by carving out a specialized niche for yourself? Work towards differentiating yourself from the competition and providing a unique experience for your readership.
4. How good is your demographics targeting? One of the easiest (and free) things you can do to increase the value (and stickiness, and loyalty, and page views per visitor) of your site is studying demographics information. Getting this information is a hands-off task. Just install a script from Crowd Science, configure your user survey, and collect more information about your visitors than you’ll know what to do with. Because people subscribe to your blog and visit it, you know that they’re interested in the subject matter, but what more should you know about them and how will that help you? Once you have this demographics information, you’ll know the age range of your visitors (and their maturity level), the gender split (so you know how sensitive you should be and how to distribute your content), their household income (which can help with subscriptions and monetization), and you’ll know what their preferences and habits are when they’re not visiting your website (so you can tweak the website to get them to stay longer).
5. How good are your conversions levels? Look at your overall traffic per day and per month, then look at the average traffic per post you write. What percentage of your visitors are one-time readers (and referral traffic) and what percentage are subscribers via email or rss? Out of those, what percentage are clicking on ads, downloading your e-book, sharing a post with their friends, or leaving a comment? Use heatmaps and clicktracking software to monitor how your readers interaction with your website and optimize your calls to action accordingly. As for engagement (sharing or commenting) educate the audience about the benefits of interacting and make the process rewarding.

These are just a few ways to invest back into yourself and increase the ‘value’ of your venture even if gross revenue is declining. All of these will help you with any potential sale in the future because they increase present value of future earnings (and future income), but will also help you increase your profit margins (and income) even if gross revenues are declining.